EUR / JPY retreats from yearly highs, supported around 132.00

• EUR / JPY hits new highs in 2021 and then pulls back.
• US yields are under pressure, dragging the dollar lower.
• Initial claims increased by 473,000, producer prices increased 0.6% month-on-month.

After posting new yearly highs in the 132.70 / 75 zone early in the session, the EUR/JPY it was under some selling pressure on Thursday.

EUR / JPY remains near 132.00

The EUR / JPY extends the weekly advance well beyond the key 132.00 level and visits the area last seen in September 2018 beyond 132.70.

The strong recovery in US yields reignited the selling bias around the Japanese yen, causing further upside traction in EUR / JPY.

In fact, US inflation figures for the month of April were stronger than initially estimated, further fueling market talks regarding higher inflation in the coming months and raising US yields. 10-year US back to the 1.70% area.

There was nothing scheduled on the euro agenda on Thursday and all attention was turned to the US calendar: Initial claims increased by 473,000 over the past week, major producer prices gained 0.6% month-on-month in April and 6.2% over the previous year, while underlying prices increased 0.7% month-on-month and 4.7% compared to April 2020.

Technical levels

So far, the crossing is gaining 0.10% to 132.43 and a breakthrough of 132.73 (May 12, 2021 high) would pave the way for a test of 133.00 (psychological hurdle) and then 133.13 (September 21, 2018 monthly high) . On the other hand, the immediate containment is located at 130.98 (weekly / monthly minimum of May 5) seconded by 130.31 (50-day SMA) and finally 129.58 (weekly minimum of April 23).